Tag Archives: jim demint

2012 Primary, Dirty Tricks, Health Law, Obama, True Talking Points

How AARP Made $2.8 Billion By Supporting Obama’s Cuts to Medicare

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We have reported on this before.

Forbes:

As you know if you’ve been reading this blog, Obamacare cuts $716 billion from Medicare in order to pay for its $1.9 trillion expansion of coverage to low-income Americans. It’s one of the reasons why seniors are more opposed to the new health law than any other age group. So why is it that the group that purports to speak for seniors, the American Association of Retired Persons, so strongly supports a law that most seniors oppose? According to an explosive new report from Sen. Jim DeMint (R., S.C.), it’s because those very same Medicare cuts will give the AARP a windfall of $1 billion in insurance profits, and preserve another $1.8 billion that AARP already generates from its business interests.

Here’s how it works. AARP isn’t your every-day citizens’ advocacy group. The AARP is also one of the largest private health insurers in America. In 2011, the AARP generated $458 million in royalty fees from so-called “Medigap” plans, nearly twice the $266 million the lobby receives in membership dues.

Medigap plans are private insurance plans that seniors buy to cover the things that traditional, government-run Medicare doesn’t, like catastrophic coverage. Medigap plans also help seniors eliminate the co-pays and deductibles that are designed to restrain wasteful Medicare spending.

AARP blocked Medigap reforms, saving the group $1.8 billion

Adding catastrophic coverage to Medicare, while restraining the ability of Medigap plans to waste money, is a key to Medicare reform, one that has been a big part of bipartisan plans in the past. According to the Kaiser Family Foundation, the Medigap reforms that AARP blocked would have saved the average senior as much as $415 in premiums per year.

But the AARP aggressively, and successfully, lobbied to keep Medigap reforms out of Obamacare, because AARP receives a 4.95 percent royalty on every dollar that seniors spend on its Medigap plans. Reform, DeMint estimates, would have cost AARP $1.8 billion over ten years.

Cuts to Medicare Advantage could earn AARP over $1 billion

Not only did AARP succeed in getting Democrats to balk at Medigap reform. Obamacare’s cuts to Medicare Advantage will drive many seniors out of that program, and into traditional government-run Medicare, which will increase the number of people who need Medigap insurance.

That means more royalty profits for the AARP. Reps. Wally Herger (R., Calif.) and Dave Reichert (R., Wash.) estimated that the change “could result in a windfall for AARP that exceeds over $1 billion during the next ten years.”

AARP Medigap plans exempted from Obamacare’s insurance mandates

It gets worse. AARP Medigap plans are exempted from most of Obamacare’s best-known insurance mandates. AARP Medigap plans are exempted from the ban that requires insurers to take all comers, regardless of pre-existing conditions. The plans are exempted from the $500,000 cap on insurance industry executive compensation; top AARP executives currently make more than $1 million. AARP plans are exempt from the premium tax levied on other private insurers. IPAB, Medicare’s rationing board, is explicitly barred from altering Medicare’s cost-sharing provisions, provisions that govern the existence of Medigap plans.

And AARP Medigap plans are allowed to have twice the administrative costs that other private insurers are allowed under Obamacare’s medical loss ratio regulations. This last point is key, because AARP’s 4.95 percent royalty is a significant administrative cost.

Democrats routinely excoriate private insurers for supposedly putting profits above people. “No American should ever spend their golden years at the mercy of insurance companies,” President Obama told the AARP yesterday. But the typical private insurer gets by on a profit margin of about 5 to 6 percent. AARP’s 4.95 percent royalty, on the other hand, doesn’t do anything to make a health plan operate more smoothly: it’s just pure profit for AARP.

2012 Primary, Culture War, True Talking Points

Hawkins: Five Annoying Types Of Republicans

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Our friend John Hawkins made this fun, but important post on something that many of us take for granted. This reminder of what a Republican should not be is always timely. Everyone should print this one out and keep it in their wallets 🙂

John Hawkins:

The mainstream media is awash with criticism of Republicans, but it always denounces the wrong people. If you listen to the media, you’d think the GOP is being wrecked by people like Jim DeMint, Allen West, Sarah Palin, and the Tea Party. In other words, the real problem with the Republican Party is supposed to be the responsible conservatives who put their country first, want to keep us from going broke, and actually represent the people who elected them. Wrong answer, buddy. You want to know the types of Republicans that are hurting the GOP?

1) The Sell Outs: Liberals love pundits who claim to be conservatives, but tell them what they want to hear about the Republican Party. So, if you have no integrity, like say David Frum, David Brooks, Meghan McCain, Joe Scarborough, or Kathleen Parker, you call yourself a Republican, but spend most of your time criticizing your “own side.” Nothing on the Left ever seems to get you as agitated as the things the people “on your side” do. Liberals get a pass for the same sort of comments that infuriate you when it comes out of the mouth of a conservative. That’s because when you’re a performing seal for the Left, you have to be tame and balance a ball on your nose just the way the Lefties like or they might stop giving you fish.

2) The Purists: Of course, you can go too far in the other direction, too, like the members of the “I’m more conservative than you” club. These are the people who tell you there’s no difference between the Republican Party and the Democrats. They take their ball, go home, and don’t vote in the general election when the candidate they support doesn’t win a primary. Issues like electability, the chances of actually passing legislation, and what the general public wants are never taken into consideration. This is how you end up with people who think we can do better than Scott Brown (71% ACU rating) in Massachusetts or that we can just decide to never raise the debt limit again, even though we’ve already spent all of the money. If you want to have it your way, go to Burger King because you’re not ever going to get everything you want in politics.

3) The Appropriators: If there’s one defining difference that separates Republicans from Democrats, it’s spending. Republicans want less of it, Democrats want more — well, at least that’s how it should be. Yet, there are big government Republicans. There are Republicans who love earmarks. There are Republicans who think it’s fine to fritter taxpayer money away, but they just want to waste a little less than the Democrats. These people are not just killing the Republican brand; they’re helping to ruin the country.

4) The Bubbleheads: One of the idiosyncrasies of D.C. Republicans is that many of them are smart people, they’re well informed, they have inside info, and they consider themselves to be conservative — yet they have no idea how out of touch they are with the base and the rest of the country. This is how you end up with Republicans supporting Bridges to Nowhere, increased National Endowment of the Arts funding, or pushing comprehensive immigration reform and Harriet Miers. The average talk radio listener or blog reader has a better read on politics in some areas than senators and congressmen because they’re not mired in that D.C. bubble with aides, consultants, pollsters, and lobbyists all pushing the same monolithic way of thinking. If you’re a Republican in D.C. who doesn’t get that, you’re part of the problem, not part of the solution.

5) The Compromise Fetishists: There’s nothing wrong with compromise per se. Republicans should be willing to compromise with Democrats — if it’s on a bill that will make the country significantly better overall. How many bills are there fitting that description that have been passed in the last decade or so? Certainly no more than a handful — and none have been passed during the Obama Administration. That’s because “compromise” in D.C. usually starts with the idea that Democrats get 90% of what they want and then Republicans negotiate to see how badly they’re going to lose. Yet, we hear some Republicans lauding compromise like it’s a worthwhile goal in and of itself. A compromise on a bad bill isn’t a win. Did Republicans make a mistake by refusing to work with the Democrats on the stimulus or Obamacare? Should they have worked with Obama to raise taxes, pass comprehensive immigration reform, or to do another stimulus? Of course not! Half of stupid is still pretty stupid, stupid.